Anhydrous ammonia prices skyrocket
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By BETH ZUMWALT
Anhydrous ammonia, the least expensive nitrogen fertilizer used widely in commodity production, mostly corn has reached $1,000 or more per ton compared to $495 per ton last year. The previous high crop-season average price for anhydrous ammonia was $851 per ton in 2014.
Last year, the price was around $850-$900 and this year is closer to $1,400 with stabilizers and application costs added into the price.
Ed Logan, owner of Logan Ag in Griggsville and Winchester, says the issue is three-fold: supply, transportation issues and price gouging.
“Producers are applying anhydrous ammonia in historical amounts this fall,” Logan said. “They are afraid of what the price will be in the spring. Many anticipated this and contracted early.”
According to Purdue University, anhydrous is usually applied at 238 lbs per acre. Rates may vary depending on percentages applied. Logan says a rule of thumb is to take the price of a ton of anhydrous ammonia and divide it by 10.
Logan says he is unsure why there is a shortage, that is being attributed to the cost of natural gas, but he doesn’t think the prices of the gas used to make the product are that high.
“There is a lot of price gouging out there,” he said. “We get 95 percent of our product at the Meredosia Terminal. When they were out, we tried other terminals and only one place had any and they raised their price $150 in one day.”
Logan said Logan Ag is bringing anhydrous in from Weaver, Iowa, about 100 miles away from Griggsville and Mt.Vernon, Ind. about 260 miles from Griggsville. As of Monday only one of those places had any product to offer.
“ I found some loads to pull in East Dubuque, IL and that’s where we are going tomorrow,” Logan said Monday. “About 220 miles from Griggsville.”
Transportation is the other issue.
Logan said Meredosia was supposed to get a load of anhydrous ammonia but as of Monday, still had zero tons available.
“Priority is being given to the southbound barge traffic,” Logan said. “The north bound traffic is being held back, making deliveries further apart. The Corps of Engineers is directing barge traffic now, first time I ever remember giving preference to one direction or the other.”
Logan said he expects the price of anhydrous to rise a little more, then level off for spring applications, but will still be much higher than previous years.
Still he thinks a lot of producers may turn to soybeans, despite corn prices being high enough to still make the crop profitable at this time. Predictions say corn prices should remain level throughout the winter and into the spring.